Gurgaon-based hyperlocal grocery delivery startup PepperTap, which is one of the more heavily backed hyperlocal delivery startups in the country, is shutting down its operations in six major cities of India, including Ahmedabad, Chandigarh, Mumbai, Kolkata, Chennai and Jaipur. Along with shutting down operations, it is also going to lay-off 400 delivery men.
This year, Gurgaon-based hyperlocal delivery startup Grofers had shut down its operations in 9 cities – Bhopal, Bhubaneswar, Coimbatore, Kochi, Ludhiana, Mysore, Nashik, Rajkot and Visakhapatnam. The employees in these locations have been offered positions in other cities.
In the recent times, to conserve capital these startups have stopped offering heavy discounts and are now spending less on marketing efforts, largely due to investor pressure to improve financial metrics.
PepperTap had rolled back operations in smaller towns like Agra and Meerut after a month-long pilot failed to take off. However, the company has confirmed that it will continue to operate in Delhi, Gurgaon, Hyderabad, Pune, Noida, Bangalore, Ghaziabad and Faridabad — few of its strongholds, where it continues to enjoy decent dominance.
Navneet Singh, co-founder and chief executive PepperTap, said,
“Even though PepperTap has been able to establish itself as a leading hyperlocal grocery delivery service, given the short to mid-term investment climate outlook, we have decided to focus on depth rather than breadth. We are digging our heels in for the long term. We will focus on building a stellar customer experience by providing additional categories and services that differentiate us from our competition in cities where we continue to operate in.”
Founded in 2013 by Navneet Singh and Milind Sharma, the company has raised $4 million in Series B funding round in december from Innoven Capital, in addition to the $36 Mn raised recently from Snapdeal, Sequoia India, SAIF Partners, Ru-Net, Beenext & JAFCO Asia. Till date, PepperTap has raised $51.2 million in external capital.
PepperTap claims to process over 20,000 orders on a daily basis. The company had introduced ‘live chat’ feature in the app to resolve queries instantly. From less than $1 million GMV run rate at the start of the fiscal year 2015-16, the company claims to be on track to end the year with a GMV run-rate of over $250 million.
In a renewed, and rather subdues strategy of sorts, most of these startups are trying to focus on consolidating their current businesses, rather than going for a full blown expansion.